Sunday, March 28, 2010

Phoenix Housing Markets Shows Signs of Recovery; February Home Sales Highest Level in Four Years

From DQNews -- Phoenix region total home sales (houses and condos) in February rose to the highest point for that month in four years and posted a normal gain over January as already-robust demand from absentee and cash-only buyers grew. The median sale price inched up from the month before and was the same as a year ago, marking the first time since January 2007 that the overall median didn’t drop on a year-over-year basis. Other highlights:

1. The $131,900 median paid for existing, single-family detached houses was 5.5% higher than a year ago – the first time that median increased year-over-year since March 2007.

2. The median price paid per square foot for those resale houses increased 5.8% percent from a year ago, marking the first annual gain since October 2006.

3. A total of 6,824 new and resale houses and condos closed escrow in February, up 9.6% from the month before and up 13.0% from a year earlier (see chart above).

4. February’s total sales were the highest for that month since February 2007, when 8,940 homes sold. Total resales – houses and condos combined – were the highest for a February since 2006.

5. The median price paid in February for all new and resale houses and condos combined was $135,000, up from $131,540 in January and the same as a year earlier (see chart). The median paid last month for resale single-family detached houses was $131,900, up 1.5% from $130,000 in January and up 5.5% from a year ago.

6. Foreclosure activity dipped in February: The 4,635 single-family house and condo units foreclosed on in the Phoenix region represented a 6.2% decline from January and an 18.4% drop from a year earlier.

MP: Phoenix housing sales in February were the highest since 2006, with some upward movement in single-family home prices, and a reduction in foreclosure activity in February - important factors that signal a gradual recovery in one of the hardest-hit real estate markets.

4 Comments:

Isn't it coincidental that the median home price increases Phoenix is seeing are almost identical to the amount of stimulus that is being offered via the home buyers tax credit (not to mention the MASSIVE amounts of other stimulus for the industry). We must also keep in mind that current statistics are mostly being compared to the near peak of one of the worst housing market collapses in history.

So yes, the data seems to imply that the Phoenix real estate market is better than last year. But the fact that the Phoenix housing market is only marginally better than one of the worst housing markets in history (despite government subsidies), I wouldn't jump to any conclusions about recovery in the area.

On a related note, my wife and I visited some friends in a suburb of Phoenix a few years back. During our 50 minute drive between Phoenix and their home, we drove through new residential developments virtually the entire way. And the new construction appeared to continue well past our destination. That area epitomized the housing bubble like nothing I had ever experienced, despite the fact that I was coming from Southern California and had just driven through one of the worst bubble areas in the entire country.